Lincoln Electric (NASDAQ: LECO) and SPX (NYSE:SPXC) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
67.0% of Lincoln Electric shares are held by institutional investors. Comparatively, 86.7% of SPX shares are held by institutional investors. 3.3% of Lincoln Electric shares are held by company insiders. Comparatively, 0.6% of SPX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a summary of recent recommendations for Lincoln Electric and SPX, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lincoln Electric presently has a consensus target price of $104.67, suggesting a potential upside of 16.74%. SPX has a consensus target price of $32.00, suggesting a potential downside of 0.65%. Given Lincoln Electric’s stronger consensus rating and higher probable upside, equities analysts plainly believe Lincoln Electric is more favorable than SPX.
This table compares Lincoln Electric and SPX’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Lincoln Electric has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, SPX has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.
Lincoln Electric pays an annual dividend of $1.56 per share and has a dividend yield of 1.7%. SPX does not pay a dividend. Lincoln Electric pays out 41.2% of its earnings in the form of a dividend. Lincoln Electric has raised its dividend for 14 consecutive years.
Valuation and Earnings
This table compares Lincoln Electric and SPX’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lincoln Electric||$2.62 billion||2.24||$247.50 million||$3.79||23.66|
|SPX||$1.43 billion||0.97||$89.30 million||$1.78||18.10|
Lincoln Electric has higher revenue and earnings than SPX. SPX is trading at a lower price-to-earnings ratio than Lincoln Electric, indicating that it is currently the more affordable of the two stocks.
Lincoln Electric beats SPX on 13 of the 17 factors compared between the two stocks.
Lincoln Electric Company Profile
Lincoln Electric Holdings, Inc. is a manufacturer of welding, cutting and brazing products. The Company operates through three segments: Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, as well as the retail business in the United States. Its welding products include arc welding power sources, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication. Its product offerings also include computer numeric controlled plasma and oxy-fuel cutting systems, and regulators and torches used in oxy-fuel welding, cutting and brazing.
SPX Company Profile
SPX Corporation supplies infrastructure equipment serving the heating and ventilation (HVAC), detection and measurement, power transmission and generation, and industrial markets in the United States, China, South Africa, the United Kingdom, and internationally. It operates through three segments: HVAC, Detection and Measurement, and Engineered Solutions. The HVAC segment engineers, designs, manufactures, installs, and services cooling products for the HVAC and industrial markets, as well as boilers, comfort heating, and ventilation products for the residential and commercial markets. The Detection and Measurement segment offers underground pipe and cable locators, and inspection equipment, as well as bus fare collection systems, communication technologies, and specialty lighting products. The Engineered Solutions segment provides transformers for the power transmission and distribution markets; and process cooling equipment, as well as rotating and stationary heat exchangers for the industrial and power generation markets. This segment sells transformers for publicly and privately held utilities under the Waukesha brand name; and process cooling products and heat exchangers under the brand names of the SPX Cooling, Marley, Yuba, and Ecolaire. The company markets its products through various distribution channels, such as direct to customers, independent manufacturing representatives, third-party distributors, and retailers. SPX Corporation is headquartered in Charlotte, North Carolina.
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